The European components market contraction persisted into the second quarter of 2024, significantly impacting the distribution industry.
According to DMASS Europe e.V., the European components distribution market experienced a 26.9% decline in Q2 2024 across all components, resulting in consolidated sales of €4.09 billion. While IP&E (Interconnect, Passive, and Electromechanical) components showed signs of stabilisation with a reduction of only 12.9%, amounting to €1.48 billion, the semiconductor sector continued to feel the impact of substantial growth over the past three years. Semiconductor sales dropped by 33.1% to €2.62 billion.
Hermann Reiter, Chairman of DMASS: “When it came to sales, the second quarter hopefully did not surprise anyone. The low bookings of 2023 are now turning into equally low revenues. Due to still high inventory levels, especially in the semiconductor field, and due to macro-economic uncertainties, a return to growth in 2024 for distribution is unlikely or could happen earliest at the end of the year. However, as we can see, parts of the market – IP&E (Interconnect, Passive and Electromechanical) – have started to normalise already, so our confidence that 2025 will see a return to growth is very high. What makes us a bit nervous is the low visibility within the supply chain and the lack of longer-term procurement strategies. We hope that the industry isn’t making the same mistakes as in 2020.”
Semiconductors (Q2)
Semiconductor distribution sales in Europe fell by 33.1% to €2.62 billion, marking the lowest sales value since Q4 2021, though still above pre-COVID levels. Regional disparities were evident, with Germany, the largest market, contracting more severely than other major countries. In contrast, the UK, France, Iberia, and Eastern Europe performed better than the average.
At the product side, almost all sectors were equally weak. Exception: Programmable Logic took a massive dive of -48%. See table below.
Interconnect, Passive, and Electromechanical Components (Q2)
The decline in IP&E components slowed from -16.3% in Q1 2024 to -12.9% in Q2 2024, although the actual sales figures were lower than in Q1. Q2 concluded with consolidated sales of €1.48 billion. Electromechanical components outperformed passives and power supplies. Regionally, Germany and Austria underperformed, while France, the UK, the Nordic region, and Eastern Europe fared better than the average.
Reiter concluded: “We sincerely hope that Q2 has been the bottom of the current market consolidation, and that customer confidence will come back soon. Our long-term optimism for electronics in general and components in particular is unwavering. However, with the current macro-economic challenges, we hope for some help from politics. Frankly speaking, as Europe does not benefit from the AI hype but is highly dependent on industrial and automotive, we hope for the next EU commission to continue to support the digital, mobile and energy transformation laid out in the Fit-for-55 programme. Europe has a huge opportunity to create a sustainable society with the help of future-oriented technology.”
